Spectrum analysis provides a great deal of information about the health of rotating machinery. But you should consider the spectrum as a summary of the vibration within the machine.

The Fast Fourier Transform takes the time waveform and computes how much of each frequency is present and displays that as a line in the spectrum (grossly summarized, but that is basically the case). Therefore, if the vibration from the machine is generated by smooth periodic motion, then the spectrum provides a very good representation of what is happening inside the machine. But as damaged gears mesh together, and rolling elements pass over damaged areas on the raceway of the bearing, and as the pump vanes push through the fluid causing turbulence or cavitation, the vibration generated is not smooth and periodic. And there are a lot of other fault conditions that likewise do not generate smooth and periodic vibration. Thus, the only way to really understand what is happening inside the machine is to study the time waveform.

The time waveform is a record of exactly what happened from moment to moment as the shaft turns, the gears mesh, the vanes pass through fluid, and the rolling elements roll around the bearing. Each minute change that results from impacts, rubs, scrapes, rattles, surges, and so much more is recorded in the time waveform and then summarized in the spectrum. Therefore, it is critical to record the time waveform correctly and analyze it when you have any suspicion that a fault condition exists.